TORONTO Jan 15 (Reuters) - Target Corp will exit
the Canadian market after less than two years in a surprise
retreat that will throw more than 17,000 employees out of work
and trigger a $5.4 billion quarterly loss.

Shares of the U.S. discount retailer, which was granted
creditor protection for its money-losing Canadian subsidiary, at
one point rose more than 4 percent on the move. The stock was up
2.2 percent at $75.94 in afternoon trade on the New York Stock
Exchange.

The company announced on Thursday it is shutting all of its
133 Canadian stores and said it expects to report about $5.4
billion in pretax losses for its fourth quarter, which finishes
at the end of January. Losses are mostly due to the writedown of
the Canadian investment, along with exit costs and operating
losses.

Minneapolis-based Target, the No. 2 discount chain in the
United States, has struggled in Canada since its March 2013
launch. It faced huge supply chain problems due to a myriad of
problems at its warehouses, poor communication with headquarters
and the use of inexperienced staff. That left stores poorly
stocked and selection limited, disappointing shoppers who had
eagerly anticipated its arrival in a market where the discount
space was long dominated by Wal-Mart Stores Inc.

Target had said in November it would review the future of
the Canadian business after the holiday season. Stores checked
by Reuters in Vancouver, Toronto and Ottawa around Christmas
showed only moderate traffic and Chief Executive Brian Cornell
said he didn't see the "step-change" in performance required to
justify staying the course.

No matter how Target crunched the numbers it could not
envision making profits until 2021, Cornell said. He told a
conference call the company was "facing a decision to devote
billions of dollars of additional resources for the Canadian
segment without the realistic prospect of an appropriate
return."

The move surprised some analysts who had expected Target to
close its weakest stores and try to fix the rest. Before
Thursday's decision Target had sunk roughly $6 billion into the
market, including around $2.5 billion in capital expenditure and
$1.7 billion of losses to-date, Fitch Ratings said.
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